How Would Imposing a Minimum Wage Above the Market-Clearing Wage

How would imposing a minimum wage above the market-clearing wage affect employment in a competitive labor market?

A) Employment would increase as previously unemployed workers would be more encouraged to find a job.
B) Employment would increase because a higher minimum wage would create more jobs for low-skilled workers.
C) Employment would increase as firms would illegally hire workers below the original competitive wage.
D) Employment would be unchanged as workers are nonresponsive to low wages.
E) Employment would decrease as some workers who are willing to work at the lower competitive wage would no longer be able to find work.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Sign up to view answer